Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Values of Financial Instruments [Abstract]

Financial assets accounted for at fair value on a nonrecurring basis

The following table sets forth financial assets that were accounted for at fair value on a nonrecurring and recurring basis by level within the fair value hierarchy as of September 30, 2014 and December 31, 2013:

			September 30, 2014 Fair Value Measurement Using:
	September 30, 2014		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(dollars in thousands)
Nonrecurring fair value measurements
Impaired loans	$	14,893	$	-	$	-	$	14,893
Foreclosed real estate		1,157		-		-		1,157
Total nonrecurring fair value measurements	$	16,050	$	-	$	-	$	16,050
Recurring fair value measurements
Mortgage servicing rights	$	708	$	-	$	-		708
Rate lock commitments		277		-		277		-
Mandatory forward contracts		63		-		63		-
Total recurring fair value measurements	$	1,048	$	-	$	340	$	708
			December 31, 2013 Fair Value Measurement Using:
	December 31, 2013		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(dollars in thousands)
Nonrecurring fair value measurements
Impaired loans	$	16,553	$	-	$	-	$	16,553
Foreclosed real estate		8,972		-		-		8,972
Total nonrecurring fair value measurements	$	25,525	$	-	$	-	$	25,525
Recurring fair value measurements
Mortgage servicing rights	$	723	$	-	$	-	$	723

Assets measured at fair value on a recurring and nonrecurring basis utilizing level 3 input

The following table presents additional quantitative information about assets measured at fair value on a recurring basis and for which Bancorp has utilized Level 3 inputs to determine fair value:

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
September 30, 2014
Mortgage servicing rights	$	708	Market approach	Weighted average prepayment speed		8.81	%
December 31, 2013
Mortgage servicing rights	$	723	Market approach	Weighted average prepayment speed		8.30	%

All appraisals are reviewed by the credit department; however, no modifications or adjustments are made to the appraisals received.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Bancorp has utilized Level 3 inputs to determine fair value:

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
September 30, 2014
Impaired loans	$	14,893	Present value of future cash flows (1)	Discount rate		-6.00	%
Foreclosed real estate	$	1,157	Appraisal of  collateral (2),(4)	Appraisal adjustments (3)	-6.00% to -24.83% (-15.43%)
December 31, 2013
Impaired loans	$	15,942	Present value of future cash flows (1)	Discount rate		-6.00	%
	$	611	Appraisal of collateral (2)	Liquidation expenses (3)		-6.00	%
Foreclosed real estate	$	8,972	Appraisal of  collateral (2),(4)	Appraisal adjustments (3)	-6.00% to -44.08% (-12.69%)

(1) Cash flow which generally include various level 3 inputs which are not identifiable.

(2) Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(3) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(4) Includes qualitative adjustments by management and estimated liquidation expenses.

Estimated fair values of financial instruments

The estimated fair values of Bancorp's financial instruments as of September 30, 2014 and December 31, 2013 were as follows:

					Fair Value Measurement at September 30, 2014
	Carrying Amount		Fair Value		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets	(dollars in thousands)
Cash and cash equivalents	$	31,618	$	31,618	$	31,618	$	-	$	-
Investment securities (HTM)		62,297		62,746		-		62,746		-
Loans held for sale		9,601		9,857		-		9,857		-
Loans receivable, net		620,060		634,676		-		-		634,676
FHLB stock		5,936		5,936		-		5,936		-
Accrued interest receivable		2,392		2,392		-		2,392		-
Mortgage servicing rights		708		708		-		-		708
Rate lock commitments		277		277		-		277		-
Mandatory forward contracts		63		63		-		63		-
Financial Liabilities
Deposits	$	537,743	$	538,664		-		538,664		-
FHLB advances		115,000		108,744		-		108,744		-
Subordinated debentures		24,119		24,119		-		-		24,119
Accrued interest payable		1,886		1,886		-		1,886		-
Off Balance Sheet Commitments	$	-	$	-	$	-	$	-	$	-

					Fair Value Measurement At December 31, 2013
	Carrying Amount		Fair Value		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets	(dollars in thousands)
Cash and cash equivalents	$	98,376	$	98,376	$	98,376	$	-	$	-
Investment securities (HTM)		44,661		45,213		-		45,213		-
Loans held for sale		3,726		3,825		-		3,825		-
Loans receivable, net		602,813		610,335		-		-		610,335
FHLB stock		6,190		6,190		-		6,190		-
Accrued interest receivable		2,353		2,353		-		2,353		-
Mortgage servicing rights		723		723		-		-		723
Financial Liabilities
Deposits	$	571,249	$	573,371		-		573,371		-
FHLB advances		115,000		106,876		-		106,876		-
Subordinated debentures		24,119		24,119		-		-		24,119
Accrued interest payable		1,375		1,375		-		1,375		-
Off Balance Sheet Commitments	$	-	$	-	$	-	$	-	$	-